Jester Company was making a product for $70 and selling it for $90. A competitor began selling the same product for $78. Suppose the company wants to meet the competition's price and maintain the same amount of profit per unit. What would be the target cost?
A) $18
B) $38
C) $48
D) $58

Question

Quizplus · Accepted Answer

The original profit per unit was $20 ($90 - $70). To maintain the same profit at the new selling price of $78, the target cost should be $58 ($78 - $20).

Jester Company Was Making a Product for $70 and Selling